FAP Feels OK for SGs to Be in Lifetime of HDB Debt. 60% Agree.

[h=2]Tan Chuan Jin: Most HDB loans taken from onset is about 22 or so years[/h]Posted by temasektimes on April 26, 2012
Though some Singaporeans have been complaining that they need to take up a 30 year bank loan to pay for their HDB flats, the reality on the ground is that many are able to repay their loans before that.

In a note written at 3.48am in the morning, Minister of State for National Development Tan Chuan Jin took pains to reassure Singaporeans that HDB flats remain very much affordable to them.


Using the example of Fernvale Lea (pic: above) in Sengkang to illustrate his point succinctly, Mr Tan managed to prove beyond any reasonable doubt that Singaporeans are able to afford HDB flats with minimal cash outlay in their monthly installments.
For example, a 2 room flat cost about $100,000 in Fernvale Lea and a couple earning $1,000 need only pay $182 monthly from their CPF contributions for 25 years with no monthly cash outlay:
2 Rm. Typical price about $100,000. Couple earns $1,000. AHG $40,000 + SHG $20,000. 25 year HDB loan will see their monthly repayments ($182/mth) fully covered by their CPF contributions (OA). No monthly cash outlay.
Mr Tan added that most HDB loans taken from onset is only about 22 years:
“On average thus far, most HDB loans taken from onset is about 22 or so years. As income rises, and people choose to repay earlier, period can come down.When I last shared this a few months ago, those aged 55 who have not discharged their HDB loans are about 12+%”
Despite his detailed explanation, many netizens remain skeptical that HDB flats remain affordable to the masses.
Some responses on Facebook:
“The average Singaporean probably can earn well for the first 12 years of working life. After that, be prepared to be retrenched and replaced by a cheaper and younger foreigner. With such lack of job security, of course public housing is out of reach.” – Mark Chan
“That is why it had to be a challenge from the normal citizen pose to him. Only give him a standard 4 rm flat and with his wives and kids and no car no chaffer. A monthly 2K hard cash see if he can survive with the eletri bills, kids expenses and monthly house expense and the monthly housing loan of 600 per month. See if he can survive in distributing his ‘pie’ to all these monthly expenses before he start talking. Cos that is the factual a normal singapore young family is facing which obviously the ministers had not face themselves.” – Lynn Tan
“I want to ask him whether he knows the price of bottled cooking gas, price of meats and fish in the wet market (not cold storage) before he comes and say whether HDB is out of reach or implying that singaporeans aren’t buying within their means … cost of living … does he know the meaning? And why everything use market conditions to price the Similar HDB apartment within a block. Wasn’t the tender and construction price the same for all within the block so logically shouldn’t both be sold at the same price? It’s “subsidized” isn’t it??” – Goh Jane Lee

[h=2]Tan Chuan Jin asks netizens: Is the HDB flat really so out of reach?[/h]Posted by temasektimes on April 26, 2012
Minister of State for National Development Tan Chuan Jin has responded to an article written by a netizen ‘Gin Tai’ on the increasing unaffordability of HDB flats on his Facebook.
In the article, ‘Gin Tai’ lamented at the sky-rocketing prices of HDB flats in Singapore in recent years which has priced many Singaporeans out of reach. He also expressed his unhappiness that similar-sized flats are not priced the same. (read more here)
In a note posted last night, Mr Tan began by asking netizens if the housing situation in Singapore is really so ‘dire’:
“Let me just talk about the housing situation in Singapore. Is it really so dire? Is the HDB flat really so out of reach?”
Mr Tan explained that HDB flats are not priced the same because when determining the prices of flats offered, HDB factors in the costs of building the flat as well as the prevailing market conditions at the time of the offer and the individual attributes of the flats.
“Is there really a difference in value? Many Singaporeans who have sold their flats know that these different values would surface immediately in terms of the price their different flats can command. Should we therefore price them all the same? If they were, everyone would just wait for a flat on the top floors in a matured estate. And some would make huge capital gains compared to others when they sell.”
He added that subsidies and grants remain in place for Singaporeans in order to keep a range of different flat types affordable for Singaporeans at different income levels and urge Singaporeans to buy flats within their means:
“Do buy within your means. I know that these are emotive issues. But HDB does indeed cater to the vast majority of Singaporeans, from those in rental flats, to those who are comfortably in the middle classes. 80% of Singaporeans live in HDB flats. 90% of them own their own flats.”
Singapore has one of the highest home ownership in the world which is made possible by the generous subsidies and housing grants given by the government over the years to enable Singaporeans to own their own flats.
Read Mr Tan’s note here.